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Global investment towards clean energy


1 October, 2016

After three years during which the USA was the largest destination for investment in energy supply, China retook the top position in 2015, with $315bn spent in 2015, despite a slowing in the pace of its headlong economic growth.

Investment in renewable energy in 2015 remained robust worldwide, according to the International Energy Agency, the global energy watchdog, which amassed the data. The move towards clean energy was driven by government policies, with countries pursuing low-carbon growth.

Electricity generation spending reached USD 420 billion, with renewables accounting for the about 70% of the totalUSD 288 billion. Gas generation investment plummeted by 40% to USD 31 billion, while coal investment rose by nearly a quarter to USD 78 billion, largely due to China.

About a fifth of total energy spending was invested in renewable and other low-carbon forms of energy in 2015.  Much of it was in electricity generation, in which renewable power takes the lion’s share of available investment funds. This has been further aided by steep falls in the cost of wind turbines and solar panels.By contrast, investment around the world in gas-fired power generationfell by close to 40%.

Worldwide oil and gas still attract highest investment. However, a new low-carbon generation – renewables and nuclear exceeds the entire growth of global electricity demand in 2015.

Between 2011 and 2015, renewable power capacity spending was relatively flat, but investment yielded 40% greater capacity additions and generates a third more power thanks to better and cheaper wind and solar technology and deployment in markets with better resources. 

Some $221 Billion were invested in energy efficiency, $313 Billion in all renewable energy sources and $21 Billion in new nuclear plants, according to the figures of World Energy Investment 2016, IEA. 

The investment figures show that globally electricity networks investment grew to over USD 260 billion in 2015, a 14% increase from 2014. China and the USA were the largest investors in networks. 

The IEA, in the report World Energy Investment 2016, found that the power sector accounts for more than half of energy supply investment over the period to 2040. Cumulative investment of $710 billion in electricity T&D, is larger than investment in power plants ($635 billion) due to increasing demand and expanding electricity access.

This feature makes Southeast Asia different from China and India where more capital is required for electricity plants than in T&D. Overall almost half of cumulative investment in Asia’s electricity sector is for low-carbon technologies. 

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